Americans Play Monopoly, Russians Chess

During 1992-1993, I advised the Russian Finance Ministry on currency stabilization and sovereign debt issuance--a fruitless exercise, given that the Yeltsin government presided over a general free-for-all. At the time I was chief economist at Jude Wanniski's firm Polyconomics. Our most prominent client was private equity investor Theodore Forstmann, a friend of America's ambassador to the Russian Federation, Robert Strauss. Ambassador Strauss secured my appointment as an external advisor to Finance Minister Yegor Gaidar, including one with then Bear Stearns chief economist Larry Kudlow. Our efforts came to nought, to be sure, but I got something of an education.

On the night of November 22, 2004, then-Russian president - now premier - Vladimir Putin watched the television news in his dacha near Moscow. People who were with Putin that night report his anger and disbelief at the unfolding "Orange" revolution in Ukraine. "They lied to me," Putin said bitterly of the United States. "I'll never trust them again." The Russians still can't fathom why the West threw over a potential strategic alliance for Ukraine. They underestimate the stupidity of the West.

American hardliners are the first to say that they feel stupid next to Putin. Victor Davis Hanson wrote on August 12 [1] of Moscow's "sheer diabolic brilliance" in Georgia, while Colonel Ralph Peters, a columnist and television commentator, marveled on August 14 [2], "The Russians are alcohol-sodden barbarians, but now and then they vomit up a genius ... the empire of the czars hasn't produced such a frightening genius since [Joseph] Stalin." The superlatives recall an old observation about why the plots of American comic books need clever super-villains and stupid super-heroes to even the playing field. Evidently the same thing applies to superpowers.

The fact is that all Russian politicians are clever. The stupid ones are all dead. By contrast, America in its complacency promotes dullards. A deadly miscommunication arises from this asymmetry. The Russians cannot believe that the Americans are as stupid as they look, and conclude that Washington wants to destroy them. That is what the informed Russian public believes, judging from last week's postings on web forums, including this writer's own.

These perceptions are dangerous because they do not stem from propaganda, but from a difference in existential vantage point. Russia is fighting for its survival, against a catastrophic decline in population and the likelihood of a Muslim majority by mid-century. The Russian Federation's scarcest resource is people. It cannot ignore the 22 million Russians stranded outside its borders after the 1991 collapse of the Soviet Union, nor, for that matter, small but loyal ethnicities such as the Ossetians. Strategic encirclement, in Russian eyes, prefigures the ethnic disintegration of Russia, which was a political and cultural entity, not an ethnic state, from its first origins.

The Russians know (as every newspaper reader does) that Georgia's President Mikheil Saakashvili is not a model democrat, but a nasty piece of work who deployed riot police against protesters and shut down opposition media when it suited him - in short, a politician in Putin's mold. America's interest in Georgia, the Russians believe, has nothing more to do with promoting democracy than its support for the gangsters to whom it handed the Serbian province of Kosovo in February.

Again, the Russians misjudge American stupidity. Former president Ronald Reagan used to say that if there was a pile of manure, it must mean there was a pony around somewhere. His epigones have trouble distinguishing the pony from the manure pile. The ideological reflex for promoting democracy dominates the George W Bush administration to the point that some of its senior people hold their noses and pretend that Kosovo, Ukraine and Georgia are the genuine article.

Think of it this way: Russia is playing chess, while the Americans are playing Monopoly. What Americans understand by "war games" is exactly what occurs on the board of the Parker Brothers' pastime. The board game Monopoly is won by placing as many hotels as possible on squares of the playing board. Substitute military bases, and you have the sum of American strategic thinking.

America's idea of winning a strategic game is to accumulate the most chips on the board: bases in Uzbekistan and Kyrgyzstan, a pipeline in Georgia, a "moderate Muslim" government with a big North Atlantic Treaty Organization base in Kosovo, missile installations in Poland and the Czech Republic, and so forth. But this is not a strategy; it is only a game score.